WeWork (WeWork) Predictability Rank

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What is WeWork Predictability Rank?

Not Rated

Warren Buffett said many times that the companies he likes are:

1. Simple businesses that he understands
2. that have predictable and proven earnings and
3. with economic moat
4. those can be bought at a reasonable price.

It is hard to quantify "simple businesses that he (Buffett) understands", so we will focus on the other three characteristics instead. In GuruFocus Research: What worked in the market from 1998-2008? Part I: Introduction of Predictability Rank, we will show that the businesses that have predictable and proven earnings are usually also simple businesses that an average person could understand.

GuruFocus conducted a back test study of Warren Buffett's strategy of "buying good companies at fair prices" for the years from 1998-2008.

WeWork Predictability Rank Calculation

In our database there are 2403 stocks that have been traded from Jan. 2, 1998 to Aug. 31, 2008. We have the complete 10-year financial data and trading prices of these companies for this period. We rank the predictability of these companies based on the consistency of their revenue per share and EBITDA (earning before interest, tax, depreciation and amortization) per share over the past ten fiscal years, and study the correlation between the stock performances and the predictability of the business.

Our study may be subject to these biases and assumptions:

Dividend yields are not counted for investment returns
Effects of price changes due to spin-offs may not be fully adjusted
Study is subjected to survivorship bias due to de-listing, bankruptcy, LBO, M&A, etc.

The correlation between business predictability and investment returns of a company is showed below.

Correlation Between Business Predictability and Investment Returns

	Predictables	Non-Predictable	All stocks
Total Number of stocks	570	1833	2403
Total Lost Money	61	830	891
Total Lost More Than 50%	18	412	430
Total Lost More Than 90%	4	86	90
Average Gain	260.6%	100.0%	138.1%
Median Gain	150.0%	13.0%	39.0%
Maximum Gain	2852.0%	11483.0%	11483.0%
Maximum Loss	-100.0%	-100.0%	-100.0%
Annualized Average Gain	12.7%	6.7%	8.4%
Annualized Median Gain	8.9%	1.1%	3.1%

For the 570 predictable companies, we have seen strong correlation between the predictability of businesses and the stock performances over the past 10 years, regardless of the valuation of business at 1998. Accordingly, we have ranked the business predictability from 5-star to 1-star, as shown in this table.

Predictability Rank	5-Star	4.5-Star	4-Star	3.5-Star	3-Star	2.5-Star	2-Star	1-Star (non-predictable)	Average among all
% Out of All 2403 Stocks	3.3%	2.9%	3.7%	3.3%	3.3%	3.7%	3.3%	76.3%	100%
% that are in Loss (10y)	3%	10%	8%	9%	11%	18%	16%	45%	37%
Average Gain (10y)	364.6%	330.9%	278.0%	235.1%	243.5%	227.8%	154.8%	100.0%	138.1%
Median Gain (10y)	238.5%	193.5%	171.0%	159.0%	132.5%	113.5%	87.0%	13.0%	39.0%
Maximum Gainer	2228.0%	2547.0%	2452.0%	2852.0%	2432.0%	1892.0%	1807.0%	11483.0%	11483.0%
Maximum Loser	-82.0%	-53.0%	-67.0%	-100.0%	-83.0%	-100.0%	-78.0%	-100.0%	-100.0%
Annualized Average Gain	15.4%	14.6%	13.2%	12.0%	12.2%	11.7%	9.1%	6.7%	8.4%
Annualized Median Gain	12.1%	10.6%	9.8%	9.3%	8.2%	7.3%	6.0%	1.1%	3.1%

For detailed information about each predictability rank, please go to GuruFocus Research: What worked in the market from 1998-2008? Part I: Introduction of Predictability Rank

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WeWork (WeWork) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Real Estate » Real Estate » WeWork Inc (OTCPK:WEWKQ) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

N/A

Address

75 Rockefeller Plaza, 10th floor, New York, NY, USA, 10019

Website

https://www.wework.com

WeWork Inc is a commercial real estate company that provides flexible workspaces for technology startups and services for other enterprises. It designs and builds physical and virtual shared spaces and office services for entrepreneurs and companies. The company's revenue categories are; Membership revenue consists of fees from members, net of discounts for the access to office space provided, and Service revenue consists of additional billings to members for the ancillary services provided through their memberships in excess of monthly allowances included in membership revenue, commissions earned by the Company on various services.

Executives

Kurt Wehner	officer: Principal Accounting Officer	1 DISCOVERY PLACE, SILVER SPRING MD 20910
Benchmark Capital Management Co. Vii, L.l.c.	10 percent owner	2965 WOODSIDE ROAD, WOODSIDE CA 94062
Bruce Dunlevie	director	2480 SAND HILL ROAD, SUITE 200, MENLO PARK CA 94025
Elizabeth A. Lapuma	director	520 LAKE COOK ROAD, SUITE 315, DEERFIELD IL 60015
Henry S Miller	director	AMERICAN INTERNATIONAL GROUP, INC., 70 PINE STREET, NEW YORK NY 10270
Paul Aronzon	director	13135 DAIRY ASHFORD, SUITE 800, SUGAR LAND TX 77478
Paul Keglevic	director	STELLUS CAPITAL, 10000 MEMORIAL DRIVE STE 500, HOUSTON TX 77024
Softbank Group Corp	10 percent owner	1-7-1 KAIGAN, MINATO-KU, TOKYO M0 105-7537
Pamela Swidler	officer: See Remarks	177 9TH AVENUE, APT. 3C, NEW YORK NY 10011
David Tolley	director	C/O THE BLACKSTONE GROUP, 345 PARK AVENUE, NEW YORK NY 10154
Vikas Jayendra Parekh	director	C/O SYMBOTIC INC., 200 RESEARCH DRIVE, WILMINGTON MA 01887
Sandeep Mathrani	director, officer: Chief Executive Officer
Andre J Fernandez	officer: Chief Financial Officer	333 WEST STATE STREET, MILWAUKEE WI 53203
Alex Clavel	director	PO BOX 1093, BOUNDARY HALL, CRICKET SQUARE, GRAND CAYMAN E9 KY1-1102
Daniel B Hurwitz	director	3300 ENTERPRISES PARKWAY, BEACHWOOD OH 44122